If the price elasticity of demand for a good is exactly equal to one (unitary elastic), a change in price will lead to a proportionate change in quantity demanded, leaving the seller's total revenue completely unchanged.
- True
- False
Answer: True
Total Revenue is calculated as Price multiplied by Quantity. When demand is unitary elastic, a 10% increase in price causes exactly a 10% drop in quantity demanded. The mathematical effects perfectly cancel each other out, meaning the total revenue generated by the seller remains at its maximum, constant level regardless of price movements.